Galveston, H. & S.A. Ry. Co. v. Texas, 170 U.S. 226 (1898)

Galveston, Harrisburg and San Antonio Railway Company v. Texas

No. 421

Argued January 21, 24, 1898
Decided April 25, 1898
170 U.S. 226

ERROR TO THE COURT OF CIVIL APPEALS FOR THE FOURTH

SUPREME JUDICIAL DISTRICT OF THE STATE OF TEXAS

Syllabus

When it does not appear from the plaintiff’s statement of his case that the suit was one arising under the Constitution and laws of the United States, a petition to remove the cause into the Circuit Court of the United States should be overruled.

The provision in the Constitution of Texas of 1869 that the legislature should not thereafter grant lands to any person or persons, as enforced against the Galveston, Harrisburg and San Antonio Railway Company, the successor of the Buffalo Bayou, Brazos and Colorado Railway Company, which had received grants of public land under previous legislation to encourage the construction of railroads in that state, involved no infraction of the federal Constitution.

A clause in a charter of a railroad company granting it power to consolidate with or become the owner of other railroads is not such a vested right that cannot be rendered inoperative by subsequent legislation. passed before the company avails itself of the power thus granted.

The question in this case was as to whether the railroad company was entitled to the particular lands in controversy by virtue of the location thereon of certificates issued for building the road from Columbus to San Antonio. The ruling was that, as the law stood, no title was acquired thereby, and the state was entitled to recover. But it was also contended that no recovery could be had because the company had earned other lands of which it had been, as it alleged, unlawfully deprived. The supreme court of the state held that it was no defense to the suit, by way of set-off, counterclaim, or otherwise, that the company might have been entitled to land certificates for road constructed under the law of 1876, and said that it had

never been ruled that the claimant of land against the state under a location made by virtue of a void certificate has any equity in the premises by reason of being the possessor of another valid certificate.

Held that, in arriving at this conclusion, the state courts did not determine whether as to those other lands any vested right of the railway company had or had not been impaired or taken away, and that this Court cannot hold that the company was denied by the judgment of those courts in this respect any title, right, privilege or immunity secured by the Constitution or laws of the United States.

This was a suit commenced on behalf of the State of Texas against the Galveston, Harrisburg and San Antonio Railway Company, in the District Court of Brewster County, to recover 1,383 tracts of land, containing in the aggregate 879,078 acres, situated in various counties, and to cancel certificates and patents issued to the railway company therefor. The railway company filed a petition for the removal of the cause to the circuit court of the United States, which was overruled. The company then presented its defenses by demurrer, plea, and answer, relying on its charters, and the laws, general and special, of the State of Texas by reason whereof and action thereunder it asserted it had become entitled to the lands in question; also setting up that it had in 1880 mortgaged the land in controversy to Andrew Pierce and George F. Stone, that Pierce was dead, and that Stone was the sole surviving trustee, and was a necessary party to the suit, and the grounds on which it insisted that the state was estopped from recovering the lands, and in its answer prayed for affirmative relief.

The cause was tried, and judgment entered therein in favor of the State of Texas, and was thereupon carried by appeal to the Court of Civil Appeals for the Fourth Supreme Judicial District of the State of Texas, which court then certified the following statement and questions to the supreme court of the state for adjudication:

The State of Texas instituted suit against appellant to cancel certain land certificates and patents issued by the state to appellant for land, amounting to 879,078 1/20 acres. It was alleged and proved that the certificates and patents were issued to the Galveston, Harrisburg and San Antonio Railway Company for a portion of its railroad constructed between the Colorado River and Guadalupe River between the time of the adoption of the Constitution of 1869 and the passage of the Act of August 16, 1876 (arts. 4267-4277, Rev.Stats.). On July 27, 1870, by special act of the legislature, appellant was chartered and recognized as the successor of the Buffalo Bayou, Brazos and Colorado Railway Company. After the passage of the Act of August 16, 1876, and before its repeal in 1882, appellant constructed about 163 miles of railroad, from San Antonio westward towards El Paso, for which the state refused to issue land certificates, the governor refusing the application for inspection on May 22, 1882, on the ground that the law granting certificates had been repealed.

Question 1: Did section 6, article X, of the Constitution of 1869 repeal all laws giving railroad companies the right to earn lands from the state by the construction of railroads, and if so, would this repeal apply as well to the right to earn lands given through charters as through general laws?

Question 2: If the above be answered in the negative, did appellant succeed to the rights of the Buffalo Bayou, Brazos and Colorado Railway Company by virtue of the Special Act of 1870, said Buffalo Bayou, Brazos and Colorado Railway Company being restricted by Special Act of February 11, 1854, to run its line to Austin?

Question 3: If the laws as to land grants to railroads passed prior to 1869 were repealed by the constitution of this year, can appellant interpose and maintain in this suit the equitable defense that, if the certificates issued for that portion of the road between the Colorado and Guadalupe Rivers from 1870 to 1876 were illegally obtained, that the state is in no position to ask relief sought, by reason of the fact that appellant has earned certificates for said 163 miles of road?

Question 4: If the last question be affirmatively answered, would the fact that, at the time the land for the 163 miles west of San Antonio was earned by appellant, the public lands were exhausted affect the equities of the case?

The supreme court was of opinion

that the Galveston, Harrisburg and San Antonio Railway Company did not, by virtue of the Act of July 27, 1870, acquire the right to earn lands by the construction of its line to San Antonio.

This answered the second question, and rendered an answer to the first unnecessary.

As to the third question, the supreme court was

of the opinion that it is no defense to an action of the state for the recovery of the lands involved in this suit that the company may have been entitled to certificates for the one hundred and sixty-three miles of additional road constructed under the law of 1876.

The fourth question therefore required no answer.

The case is reported, 89 Tex. 340.

The opinion of the supreme court having been transmitted to the court of civil appeals, that court proceeded to dispose of the case, and held that there was no error in the refusal to remove the cause; that Stone was not a necessary party to the suit; that the State of Texas was not estopped, by "the illegal acts of the land commissioner in granting the land certificates and of the governor in granting patents to the land," from recovering the lands sued for, and overruled the other assignments of error in view of the answers of the supreme court to the questions propounded. Thereupon the judgment of the district court was affirmed. A motion for rehearing having been made and overruled, the company applied to the supreme court for a writ of error, which was denied; whereupon a writ of error from this Court was allowed by the chief justice of the court of civil appeals.

The Buffalo Bayou, Brazos and Colorado Railroad Company was incorporated by an Act approved February 11, 1850, and authorized to construct and maintain a railroad as therein described. Laws Tex. 1849-50, pp. 194, 198.

By an Act approved January 29, 1853, the route was defined as follows:

Commencing at a suitable point on Buffalo Bayou in the County of Harris, thence running by such course and to such point or points at or near the Brazos and Colorado Rivers, or across the same as said company shall deem advisable, with the privilege of making, owning, and maintaining such branches to said road as they may deem expedient.

By the second section of this act, there was "granted to said company eight sections of land, of six hundred and forty acres each, for every mile of railway actually completed and ready for use," for which the Commissioner of the General Land Office of Texas was authorized to issue certificates under restrictions mentioned, and upon location and survey patents were to be issued as provided. Special Laws 1853, p. 3.

On January 30, 1854, the legislature passed a general land grant act, entitled "An act to encourage the construction of railroads in Texas by donations of lands." Section 1 provided

that any railroad company chartered by the legislature of this state, heretofore or hereafter, constructing within the limits of Texas a section of twenty-five miles or more of railroad shall be entitled to receive from the state a grant of sixteen sections of land for every mile of road so constructed and put in running order.

Railroad companies applying for land under this act were required by section 3 to cause the land to be surveyed into sections of 640 acres each, and in square blocks of not less than six miles, and the field notes of the survey and map or maps to be deposited with the Commissioner of the General Land Office. Section 6 related to patents, certificates, surveys, etc.

By section 11, all the alternate or even sections of lands surveyed in pursuance to the provisions of this act were "reserved to the use of the state, and not liable to locations, entries or preemption privileges, until otherwise provided by law." Section 12 provided:

That the provisions of this act shall not extend to any company receiving from the state a grant of more than sixteen sections of land, nor to any company for more than a single track road, with the necessary turnouts, and any company now entitled by law to receive a grant of eight sections of land per mile for the construction of any railroad, accepting the provisions of this act, shall not be entitled to receive any grant of land for any branch road; provided, this act shall not be so construed as to give to any company now entitled by law to receive eight sections of land more than eight additional sections; provided, that no person or company shall receive any donation or benefit under the provisions of this act unless they shall construct and complete at least twenty-five miles of the road contemplated by their charter within two years after the passage of this act,

etc., and that the act should continue in force for ten years from the time it took effect, and no longer. Laws, 1854, p. 11.

On the same day, a supplemental act was approved providing that no railroad company benefited by the act should receive any donation of land under its charter, or under the act of which this was a supplement, for any work not done within ten years after the passage of the act. Laws, 1854, p. 16.

By a Special Act of February 4, 1854, the charter of the Buffalo Bayou, Brazos and Colorado Railroad Company was amended, and it was provided that the company should be

entitled to all the rights, privileges and benefits accruing from any general law or laws that have or may be hereafter passed by this state to encourage the construction of railroads, in the same manner and to the same extent as if the gauge of said road was the same now fixed, or which may be hereafter fixed upon by this state.

Special Laws, 1854, p. 69. On the same day, another special act was passed providing

that if the Buffalo Bayou, Brazos and Colorado Railroad Company shall avail themselves of the act to which this is a supplement, or accept any donation of land from the state, they shall not be entitled to receive any such donation from the state under the provisions of this law or any law that has heretofore been passed for their benefit, for any portion of their road which shall not be completed and ready for use within ten years from and after the passage of this act; provided that said company shall restrict themselves to the following route, viz., to an extension of their existing road to Austin, in the County of Travis, crossing the Brazos River at any point between the Town of Richmond, in Fort Bend County, and Hidalgo, in Washington County, and with the right of extending their road from Austin to connect with any road running north of Austin towards the Pacific Ocean, provided, such connections be made between the ninety-sixth and ninety-eighth parallels of longitude, and provided further that said company shall have no right to build branches from their main road.

Special Laws, 1854, p. 70.

During the period of the Civil War, two laws were passed which had the effect to relieve the existing railroad companies from the limitations as to time embraced in the Act of January 30, 1854, until two years after the close of the war. Laws 1862, pp. 43, 46, c. 69, Jan. 11, 1862.

On November 13, 1866, an act was approved to this effect:

That the grant of sixteen sections of land to the mile to railroad companies heretofore or hereafter constructing railroads in Texas shall be extended, under the same restrictions and limitations heretofore provided by law, for ten years after the passage of this act.

Laws, 1866, p. 212.

The state constitution of 1869 was adopted December 3, 1869, and accepted by Congress March 30, 1870, the sixth section of article X of which instrument read as follows:

The legislature shall not hereafter grant lands to any person or persons, nor shall any certificates for land be sold at the land office, except to actual settlers upon the same, and in lots not exceeding one hundred and sixty acres.

July 27, 1870, the legislature passed an act entitled

An act supplementary to the act to incorporate the Buffalo Bayou, Brazos and Colorado Railway Company, and to the other special acts relating to said company.

The preamble recited:

Whereas, on the seventh of July, 1868, "the roadbed, track, franchise, and chartered rights and privileges" of the Buffalo Bayou, Brazos and Colorado Railway Company were sold on executions issued on judgments against said company, and on the twenty-fourth January, 1870, the railroad of said company from Harrisburg to Alleyton, and its franchise, rights, and other property appertaining thereto, were sold under the provisions of a mortgage or deed of trust made by said company on the first November, 1860, all of which appears of record, and whereas, the Act of December 19, 1857, "supplementary to and amendatory of an act to regulate railroad companies," provides that the purchasers at such sales, and their associates, "shall be entitled to have and exercise all the powers, privileges, and franchises granted to" the company sold out "by its charter, or by virtue of the general laws of this state," and "shall be deemed and taken to be the true owners of said charter and corporators under the same, and vested with all the powers, rights, privileges and benefits thereof," and whereas the purchasers at said sales and their associates have formed a new company under said old name and have expended large sums of money in the reconstruction of said railroad, in the purchase and completion of the Columbus Tap Railroad, and the bridge of the Brazos Iron Bridge Company over the Brazos River at Richmond, and whereas, said new company desires to be distinguished by name from said "sold-out" company, to consolidate its property, and to extend said line of railroad.

Section 1 provided:

That the new company heretofore known as the Buffalo Bayou, Brazos and Colorado Railway Company, referred to in the preamble of this act, shall be hereafter known by the corporate name of "The Galveston, Harrisburg and San Antonio Railway Company," and may alter its seal to conform to its name, provided that said new company shall be liable to the State of Texas for the debt of said "sold-out" company for loans made to the latter company from the special school fund, in the same manner and to the same extent as said "sold-out" company was liable, and that said change of name shall in no respect impair or affect said liability, or the existing lien or mortgage of the state upon the railroad of said company as security for said loans; also provided that said change of name shall in no respect impair or affect any of the obligations of said new company to other parties, or the obligations of other parties to said new company; all of which may be enforced by or against said new company under said new name.

Section 3:

That said new company is hereby authorized to extend the existing line of railroad owned and operated by said company from Columbus, in Colorado County, to San Antonio, in the County of Bexar, within four years from the passage of this act, and thence to a terminus on the Rio Grande, by such route as the directors shall deem most feasible, with a branch from the most suitable point to New Braunfels, in Comal County, within four years from the passage of this act, or said new company may connect with any line of railroad that may be constructed or under construction to San Antonio or the Rio Grande, south of the latitude of the City of Austin and the Colorado River instead of building its own line beyond the point of such connection, and may build to and connect with any line of railroad that may be constructed, or under construction, and designed to form part of any railroad line to the Pacific, south of the thirty-fifth parallel of latitude; nothing herein being so construed as to exclude said new company from the right to construct also, any part of the line up the Colorado Valley, formerly designated by said "sold-out" company as its route under the provisions of the eleventh section of the Act of December 19, 1857, provided that if the said road shall not be completed within the time specified in this section, then this charter shall be forfeited.

Sections 11 and 12:

SEC. 11. That said new company shall be entitled to the same or similar rights and relief, except state aid in bonds, or endorsement of, or guarantee of interest on bonds, granted to or provided for any other railroad company by the legislature, and upon the same or similar terms and conditions, so far as such rights and relief are, in their character, applicable to said new company or its line, or lines of railroad.

SEC. 12. That nothing in this act shall be so construed as to deprive any party interested of the right to disprove any assumed fact stated in the preamble, provided that nothing in this act contained shall be construed as reviving or renewing any land grant to said company for road hereafter to be completed which it does not possess by existing law.

Special Laws, 1870, p. 45.

Section 6 of article X of the Constitution of 1869 was subsequently amended, the amendment taking effect March 19, 1873. The section, as amended, read as follows:

The legislature of the State of Texas shall not hereafter grant lands, except for purposes of internal improvement, to any person or persons, nor shall any certificate for land be sold at the land office except to actual settlers upon the same, and in lots are exceeding one hundred and sixty acres, provided that the legislature shall not grant, out of the public domain, more than twenty sections of land for each mile of completed work, in aid of the construction of which land may be granted, and provided further that nothing in the foregoing proviso shall affect any rights granted or secured by laws passed prior to the final adoption of this amendment.

August 16, 1876, a general law was enacted entitled "An act to encourage the construction of railroads in Texas by donations of lands," whereby it was provided that any railroad company theretofore chartered or which might be thereafter organized under the general laws of the state should, upon the completion of a section of ten miles or more of its road, be entitled to receive, and there was thereby granted to every such railroad from the state, sixteen sections of land for every mile of its road so completed and put in good running order. The act prescribed the usual formalities for ascertaining compliance on the part of railroad companies with the provisions of the act, the issue of certificates, etc. Laws, 1876, 153.

April 22, 1882, the legislature passed an act repealing all laws in force granting lands for the construction of railroads. Laws 1882, 3.